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Cabletron sheds networking unit

The network equipment maker sells its Digital Network Products unit to a technology acquisition firm called Gores Technology Group.

Network equipment maker Cabletron Systems has sold its Digital Network Products unit to a technology acquisition firm called Gores Technology Group.

The sale is part of Cabletron's goal of selling off or discontinuing its slow-growing businesses as it spins off into four separate companies. Financial terms were not disclosed.

Gores Technology Group is a Los Angeles-based holding company that has acquired about 30 technology firms, including business software maker Aonix and supercomputer maker Connection Machines Services. Gores is also an investor in Farallon Communications, maker of networking equipment for homes and small businesses.

Cabletron announced in late March plans to sell off or discontinue its slow-growing products, such as hubs and low-end switches, and networking equipment it acquired from Digital Equipment. Those businesses made up about $100 million to $130 million in quarterly sales, or about one-third of the company's overall revenue.

At the time, Cabletron chief executive Piyush Patel said the Digital networking equipment that it acquired in 1997 no longer fit in the company's future plans. The company is in the midst of separating into four separate companies: Riverstone Networks, targeting the service provider and high-speed Internet equipment market; Enterasys Networks, focused on corporate networks; Global Network Technology Services, a services firm; and Aprisma Management Technologies, comprised of Cabletron's software business.

A Cabletron spokesman said the sale today will allow Cabletron's four firms to concentrate on high-growth markets.

The Digital unit has 130 employees and is based in Andover, Mass. The sale of the unit ensures that existing customers of Digital networking equipment will have continued support of the products they have purchased.

Gore executive vice president Frank Stefanik said the Digital Networking products allows the company to enter the large corporate networking market.

"There's a lot of excitement in the market. It has excellent customers, excellent technology, and really good people. That's a good combination," he said.

Although Cabletron deemed the Digital products as slow-growing, Stefanik said revenue growth was good enough to warrant purchasing the unit.

Compared to what they're doing, it may be (slow-growing)," he said, in reference to Cabletron. "But to us, it looks exciting and a very good way to get into that market."